Even when a business in Hackettstown struggles with debt to the point of considering bankruptcy, its potential to continue to operate (and even grow) does not go away. Business owners might even use a bankruptcy case as the springboard needed to make organizational and cultural changes that place a company back on the path to sustainability. This may not be easy, however, as news of a bankruptcy might impact both a business’ patrons as well as its employees, prompting them to call its future into question.
A network of hospitals in California currently faces this challenge after its leadership filed for Chapter 11 bankruptcy. The hospital system faces debts of more than $500 million that have built up over the course of 20 years. Yet the system’s leaders have stated their intention to keep all six of the hospitals open using $185 million in secured financing. The hope is that the network will be able to sell some (or even all) of the hospitals in order to eliminate its accrued liabilities. Experts in healthcare finance point to the fact that while hospitals can survive bankruptcies, the care they offer does suffer somewhat due to staff turnover and issues negotiating with insurers. Despite these potential challenges, the leaders of this particular network of facilities are promising patients the same quality of care even as its bankruptcy case moves forward.
A Chapter 11 bankruptcy may indeed make it possible for a company (even one as specialized as a hospital) continue to operate thanks to the opportunity it affords to ownership groups to restructure while still maintaining control of their operations. Successfully navigating through such a can indeed be difficult, which is why those companies considering it might be wise to seek the advice and assistance of an experienced bankruptcy attorney.